1. Field of the Invention
The present invention generally relates to on-line payments and more particularly to a system for on-line payment provision that reduces transaction costs for a payment service provider.
2. Related Art
More and more consumers are purchasing items and services over electronic networks such as, for example, the Internet. Consumers routinely search for and purchase products and services from merchants and individuals alike. The transactions may take place directly between an on-line merchant/retailer/individual and the consumer, and payment is typically made by entering credit card or other financial information. Transactions may also take place with the aid of an on-line payment service provider such as, for example, PayPal, Inc. of San Jose, Calif. Such payment service providers can make transactions easier and safer for the parties involved. Purchasing through the Internet from the convenience of a consumer's home, office, or virtually anywhere (with mobile devices) is one main reason why on-line purchases are growing very quickly.
However, the provision of payment services can raise a number of issues. A payment service provider may provide payment services to a number of consumers, and each consumer may regularly use the payment service provider to make payments for purchases. For example, each consumer may use the payment service provider to make payments for purchases several times per month. When the consumers use the payment service provider to make the payment, the payment service provider pays the merchant or individual with whom the purchase was made, and the merchant or individual then pays the payment service provider a fee for the payment service provided. The payment service provider then requests and collects a reimbursement for that payment from a financial institution of the consumer. However, the payment service provider must also pay a fee to the financial institution from which the reimbursement is collected. When this scenario is repeated several time per month for each purchase made by each consumer, these fees paid to the financial institutions from the payment service provider are incurred for each purchase, which adds significant costs to the provision of the on-line payment service. These costs are exacerbated when particular financial institutions that charge higher fees are used for reimbursement for purchases.
Thus, there is a need for an improved system for on-line payment service provision.